Stocks snapped a four-day winning streak on Friday. However, it was another strong week for the stock market, as the S&P 500 sits near its all-time highs, the Dow (0.4% away) and Nasdaq (1.6%) are right there too.
Stocks weren’t the only asset class moving this week.
For example:
- Gold prices reached a six-year high, cracking $1400 an ounce and gaining more than 4% on the week.
- Oil prices surged by 8.8% this week due to geopolitical tensions between the U.S. and Iran.
- Treasury yields are near two-year lows, the 10-year Note closed at 2.065%.
- Bitcoin is trading above $10K, is the FOMO back?
- The U.S. dollar fell 1.3%.
We can largely thank Jerome Powell and his gang at the Federal Reserve Bank for the complete dislocation in the market.
And you know what?
I’m going to have to dig deep into my bag of tricks successfully navigate through these markets during the second half of 2019.
And I’m not kidding either.
That said, this week’s Jump puts a focus on:
- The Fed
- The big picture (SPY, TLT, GLD)
- Economic and corporate events
- IPOs
- As well as, some trade ideas I’m cooking up.
Table of Contents
Your Jump on the Week – Markets Are Disconnected
Well, the market made all-time highs yesterday, but pulled back a little. However, the S&P 500 finished the week up 2.2%, while the Dow and Nasdaq Composite closed up 2.4% and 3%, respectively.
The reason?
The Fed, yet again.
The Fed didn’t cut rates, but almost signaled they were leaning towards rate cuts in the future… and the market was expecting this to happen.
Just look at SPY’s run up into the Fed meeting.
With global rates falling… and slower projected global group, there’s a lot to worry about in the economy.
Now, there is a problem with cutting rates into a stock market rally, and it’s something we don’t normally see… and something could be broken.
Right now, the question is whether bonds or stocks will sell off.
If you think about it, it doesn’t really make sense for stocks and bonds to run in the same direction with no correction.
Here’s a look at the iShares 20+ Year Treasury Bond ETF (TLT).
Think about it like this… during crises (think back to 2007-2009)… the market actually was crashing… and what was going up?
Bonds.
That’s a big disconnect there.
We’re seeing stocks and bonds move in the same direction… which doesn’t seem right.
Now, I’ve learned over the years, when I don’t have a good read on the overall market (specifically SPY and bond ETFs like TLT)… it’s best to sit on the sidelines and just wait it out.
However, that doesn’t mean I haven’t been trading… I’ve actually still been finding triple-digit winners like this one in WYNN.
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Now, some other disconnects we’re seeing are in the commodities market, more specifically… gold and energy.
Gold prices have climbed to their highest levels since 2013.
Again, the dovish statements from central banks have fueled this remarkable run. Check out this crazy run in the SPDR Gold Shares (GLD) on the hourly chart.
… however, that might not be the only reason gold has been running. You see, we have increased geopolitical risks (the U.S. – China trade war and tensions in the Middle East).
With no real pullbacks in gold prices, this makes the markets even more disconnected.
Not only that, we saw oil rise 9% this week… and energy stocks have been benefitting due to tensions between Iran and U.S… after Iran shot down a U.S. military drone on Thursday.
With so much political tensions and the potential for slower economic growth… the markets may be placing too much in the Federal Open Market Committee (FOMC) to cut rates.
If I know anything about the Fed… it’s that they won’t make irrational decisions and move in either direction until there are clear signs, and a strong stock market doesn’t really give them a reason to. However, they will be focused on key economic indicators, as will I.
Now, the focus will probably be taken off the Fed next week, as all eyes will be on the G20 summit on June 28 and 29.
That said, let’s take a look at economic, earnings, and IPO calendars.
Economic Calendar
Monday, June 24
- 8:30 AM EST Chicago Fed Nat Activity Index
- 8:45 AM EST Fed’s Williams makes opening remarks at Finance Forum
- 10:30 AM EST Dallas Fed Manufacturing Activity
- 12:00 PM EST Fed’s Bostic speaks on Housing
- 1:00 PM EST Fed’s Powell to speak at Council on Foreign Relations in NY
- 6:30 PM EST Fed’s Bullard welcome remarks in St. Louis at lecture
Tuesday, June 25
- 7:45 AM EST ICSC Weekly Retail Sales
- 8:55 AM EST Johnson/Redbook Weekly Sales
- 9:00 AM EST FHFA House Price Index
- 9:00 AM EST S&P CoreLogic CaseShiller index
- 10:00 AM EST Richmond Fed Manufacturing
- 10:00 AM EST New Home Sales
- 10:00 AM EST Consumer Confidence
- 4:30 PM EST API Weekly Inventory Data
Wednesday, June 26
- 7:00 AM EST MBA Mortgage Applications Data
- 8:30 AM EST Durable Goods Orders
- 8:30 AM EST Durable Goods Ex: Transportation
- 8:30 AM EST Advance Goods Trade Balance
- 10:30 AM EST Weekly DOE Inventory Data
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Thursday, June 27
- 8:30 AM EST Weekly Jobless Claims
- 8:30 AM EST Continuing Claims
- 8:30 AM EST Gross Domestic Product (GDP Annualized for Q1-T
- 8:30 AM EST Personal Consumption
- 8:30 AM EST GDP Price Index
- 8:30 AM EST Core PCE
- 10:00 AM EST Pending Home Sales
- 10:30 AM EST Weekly EIA Natural Gas Inventory Data
- 11:00 AM EST Kansas City Fed Manufacturing
Friday, June 28
- 8:30 AM EST Personal Income and Outlays
- 9:45 AM EST Chicago PMI
- 10:00 AM EST Consumer Sentiment
Now, on the corporate earnings front… it’s going to be pretty light until next week when we have hundreds of companies reporting earnings.
Earnings Calendar
Monday, June 24
- No notable earnings.
Tuesday, June 25
Earnings Before Open
- FactSet Research System Inc. (FDS) implying 6.52% move (monthly contracts expiring June 19). Historical average move 5.86%.
- Lennar Corp. (LEN) implying 7.32% move (monthly contracts expiring July 19). Historical average move 7%.
Earnings After Close
- AeroVironment Inc. (AVAV) implying 13.26% move (monthly contracts expiring July 19). Historical average move 18.91%.
- FedEx Corporation (FDX) implying 5.60% move. Historical average move 4.92%.
- Micron Technology (MU) implying 8.55% move. Historical average move 7.23%.
- SYNNEX Corp. (SNX) implying 10.18% move (monthly contracts expiring July 19). Historical average move 8.17%.
Wednesday, June 26
Earnings Before Open
- BlackBerry Limited (BB) implying 9.26% move.
- General Mills Inc. (GIS) implying 6.18% move (monthly contracts expiring July 19). Historical average move 6.46%.
- IHS Markit (INFO) implying 5.01% move (monthly contracts expiring July 19). Historical average move 3.71%.
- Paychex Inc. (PAYX) implying 4.51% move (monthly contracts expiring July 19). Historical average move 3.71%.
- UniFirst Corporation (UNF) implying 6.21% move (monthly contracts expiring July 19). Historical average move 6.64%.
Earnings After Close
- H.B. Fuller Company (FUL) implying 7.24% move (monthly contracts expiring July 19). Historical average move 5.54%.
- Herman Miller (MLHR) implying 8.32% move (monthly contracts expiring July 19). Historical average move 10.74%.
- KB Home (KBH) implying 8.98% move (monthly contracts expiring July 19). Historical average move 8.02%.
- NovaGold Resources (NG) implying 8.67% move (monthly contracts expiring July 19). Historical average move 5.08%.
- Pier 1 Imports (PIR) implying 70.59% move (monthly contracts expiring July 19). Historical average move 26.08%.
- Rite Aid (RAD) implying 13.28% move. Historical average move 5.54%.
- Worthington Industries (WOR) implying 10.38% move (monthly contracts expiring July 19). Historical average move 12.01%.
Thursday, June 27
Earnings Before Open
- Accenture (ACN) implying 4.07% move. Historical average move 5.59%.
- Apogee Enterprises (APOG) implying 8.79% move (monthly contracts expiring July 19). Historical average move 11.93%.
- Conagra Brands (CAG) implying 8.05% move (monthly contracts expiring July 19). Historical average move 7.03%.
- GMS Inc. (GMS) implying 12.64% move (monthly contracts expiring July 19). Historical average move 10.87%.
- McCormick & Company (MKC) implying 5.42% move (monthly contracts expiring July 19). Historical average move 6.8%.
- Patterson Companies (PDCO) implying 8.86% move (monthly contracts expiring July 19). Historical average move 11.14%.
- Walgreens Boots Alliance (WBA) implying 5.60% move. Historical average move 6.73%.
Earnings After Close
- Nike Inc. (NKE) implying 5.64% move. Historical average move 7.72%.
- Progress Software (PRGS) implying 11.63% move (monthly contracts expiring July 19). Historical average move 10.61%.
Friday, June 28
Earnings Before Open
- Constellation Brands (STZ) implying 6.16% move. Historical average move 6.81%.
- JinkoSolar Holding Co (JKS) implying 14.92% move (monthly contracts expiring July 19). Historical average move 12.53%.
Expected IPOs
- Adaptive Biotechnologies (ADPT) 12.5M share IPO expected to price between $15-$17 per share.
- BridgeBio Pharma (BBIO) 15M share IPO expected to price between $14-$16 per share.
- Cambium Networks (CMBM) 5.8M share IPO expected to price between $13-$15 per share.
- Change Healthcare (CHNG) 42.8M share IPO expected to price between $16-$19 per share.
- Karuna Therapeutics (KRTX) 4.375M share IPO expected to price between $15-$17 per share.
- Morphic Holding (MORF) 5M share IPO expected to price between $14-$16 per share.
- Priam Properties (PRMI) 9M share IPO expected to price between $18-$20 per share.
- The RealReal Inc. (REAL) 15M share IPO expected to price between $17-$19 per share.
There’s going to be a lot going on this week with the G20 summit and a slew of economic indicators… and I’ll also be watching some specific stocks to play options on.
Also, don’t forget… I’ll be going live this Wednesday, June 26 and uncovering my simple options trade strategies that I’ve used to consistently beat the market in this tell-all event.
Source: WeeklyMoneyMultiplier.com | Original Link